Oil Change International argues there is a compelling case for six proposed Queensland projects to be axed in 'managed decline' of fossil fuel
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| A coalmine in the Galilee basin in central Queensland. A new report shows that existing fossil fuel projects worldwide are enough to push global warming beyond 2C. Photograph: Andrew Quilty/Greenpeace/AAP |
The report by the research and advocacy group Oil Change International argues there is a compelling case for the six Galilee coalmining proposals in the hands of Australian regulators to be axed in line with a "managed decline" of global coal, oil and gas supplies already on tap.
It shows the embedded carbon emissions from operating fields and mines worldwide, if run to the end of their projected lifetimes, would drive warming beyond the 2C limit laid down by last year's Paris agreement. Developed oil and gas reserves alone would take warming beyond the aspirational 1.5C target.
The report shows that if Australia fully exploited its untapped coal reserves – the third largest in the world behind the US and Russia – the resulting emissions would blow almost a third of the world's carbon budget for 1.5C.
About a fifth of these emissions (24 gigatonnes) would come from the six Galilee mining hopefuls who have applied for permits.
The largest is Adani's Carmichael mine, which over its lifetime would contribute more than half of these emissions through 5 bn tonnes of coal.
The China First mine proposal by Clive Palmer's Waratah Coal, which like others in the Galilee appears to hinge on Adani paving the way with rail infrastructure, is the third largest at 1bn tonnes.
The report singles out Australia and the Galilee as being on the "frontline of expansion" of the global coal industry and stopping this development "must be a priority".
"The consequence of our analysis is that no new extractive or facilitating infrastructure should be built anywhere in the world," it says.
Fellow coal giants China and Indonesia have enacted temporary bans on new coalmines and the US has a limited moratorium on new mines on public land.
That leaves Australia as one of just "two countries that are currently proceeding with major coalmining development", along with India, the report says.
India, with its urgent need for economic uplift and relatively low contribution to historical emissions, could be given a "generous support package" funded by wealthy countries to pursue low-carbon development.
But the "hard choices" by governments about phasing out existing projects should start in the developed countries such as Australia, the report says.
Adani, an Indian conglomerate, has argued its Australian mine would be pivotal in helping the Indian electricity sector move towards making cheap energy available to the impoverished. The "energy poverty" argument is contested by Adani's critics.
The company, which has been embroiled in a long series of legal challenges in Queensland from traditional owners and conservationists, has reportedly downsized the first phase of its mine and put off an investment decision till the end of 2017.
The mine would now cost $4bn to get off the ground and initially produce 25m tonnes a year, with 80% slated for its sister energy company Adani Power, the Australian Financial Review reported.
Tim Buckley at the Institute for Energy Economics and Financial Analysis said Adani's scaled-down plans remained "unbankable" for a company that held US$2.6bn net debt beside a market capitalisation of just US$1.2bn.
Adani Power was in even worse "financial distress", with net debts of more than US$7.3bn against market capitalisation of US$1.4bn, Buckley said. It was also yet to build most of the large power stations in western India which Carmichael would supply.
"Lacking economies of scale, this low-quality thermal export coal proposal lacks strategic relevance in India where the installed cost of solar is now lower than that of imported thermal coal," he said.
This casts doubt on broader development prospects in the Galilee basin, which Buckley said was "still stranded 400km inland from the coast without any industrial-grade power, road, water, aviation or rail infrastructure in place".
The report's author, Greg Muttit, said there were "only three possibilities" to consider in the future of fossil fuels extraction.
"We can manage the decline of our existing fields, shifting to clean energy and redeploying workers," he said. "Or we continue to develop new reserves that then have to be shut down suddenly, stranding assets, costing investors, and causing havoc in fossil fuel extraction-dependent communities.
"Or we just carry on as we are – and wreak economic, ecological and human catastrophe on the world."
Stephen Kretzmann, the executive director of Oil Change International, said: "If the world is serious about achieving the goals agreed in Paris, governments have to stop the expansion of the fossil fuel industry.
"The industry has enough carbon in the pipeline – today – to break through the sky's limit."
The report says the study was the first to examine the climate change implications of potential emissions from current oil, gas and coal operations in light of the Paris agreement. It draws on industry data from the oil and gas consultancy Rystad Energy and carbon budgets derived from the Intergovernmental Panel on Climate Change.
Links
- Adani Carmichael coalmine faces new legal challenge from conservation foundation
- Gaping chasm between Coalition's climate mantra and the real debate
- Adani's Carmichael mine approval labelled 'economic stupidity'
- Abbot Point coal terminal ownership still missing from Adani Ports' annual report
- Bob Katter raises funding for Galilee basin railway in talks with Turnbull
- Does the Great Barrier Reef's death haunt the dreams of coal's company directors?
- Activists launch fresh court challenge over Carmichael coalmine
- Adani's Carmichael coalmine leases approved by Queensland
- Queensland cannot factor in miners' overseas record when assessing clean-up costs
- Adani freezes investment in Carmichael mine until world coal price recovers
- Abbot Point coal terminal expansion given approval by Greg Hunt
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